Distell Group has agreed a deal to acquire a 26% stake in KWA Holding East Africa Limited (KHEAL), a leading spirits manufacturer, bottler and distributor in Kenya.

The move is part of the South African based group’s strategy to ramp up its investments in Africa.

Richard Rushton, Distell Group CEO said the KES 860 million (R105m/ £5.7m million) deal would give Distell access to market for several of its leading brands.

He said: “We are thrilled with our latest investment which comes at a time when the economic prospects across East Africa are highly promising. East Africa Common Market’s combined population of more than 150 million and an economy boosted by recent energy discoveries, present exciting opportunities.”

Last month, the company unveiled a bottling plant in Accra, Ghana. It has also secured land in Nigeria and Angola for manufacturing plants, which are scheduled to come on stream next year.

Rushton added that Distell’s Kenyan investment was down to the company’s confidence in KHEAL, its staff and the people of Kenya. “The acquisition strengthens Distell’s relationship with KHEAL and takes the partnership to a significantly more sustainable level,” he said.

Since 1998 KHEAL has been producing, bottling and distributing several Distell spirits brands. The company produces and bottles Viceroy Brandy, Clubman Punch, Castle Brand Aperitif and distributes these along with Amarula, Drostdy-Hof and Cellar Cask, among others.

Rushton added: “Distell’s wealth of experience in the ciders, spirits and wine segments will bring new capabilities to KHEAL and increase its competitive position, unlocking and creating significant value.”

KHEAL is Kenya's dominant spirits player, according to Distell, operating five distribution centres in the country, one in Uganda, as well as a wholly-owned subsidiary in Rwanda. The company also sells products through duty-free outlets in Kenya and Rwanda.

The South African group employs a partnership model so as to combine its technical skills with local in-market expertise to “add value and stimulate growth”.

KHEAL owns a number of leading local Kenya brands such as Kingfisher, Kibao, Caprice and Yatta wines which have shown strong growth in recent years and which Distell, through its involvement in the business, aims to support.